Why is the Darjeeling tea industry in crisis?

Subject: Geography

Context-

One of the key brands of the Tea Board, ‘Darjeeling Tea’, is under acute stress.
During the annual general meeting of the Indian Tea Association (ITA) in Kolkata, the Tea Board of India had sought a special financial package of ₹1,000 crore from the Centre for the tea Industry over five years.

Why is it important to save Darjeeling Tea?

Darjeeling Tea, called the ‘Champagne of Teas’, was the first Indian product to get the GI (Geographical Identification) tag in 2004 for its distinctive aroma and flavour.
7 million kg of darjeeling tea is produced from 87 gardens and most of them were exported.
During the past few months the owners of these gardens have been changed several times due to financial problems and seeking government support.

What is the threat from Nepal’s gardens?

Nepal, which shares similar climatic conditions and terrain, produces tea at a lower price because of less input costs, particularly labour, and fewer quality checks.
The inferior quality of tea from Nepal was being imported and then sold and re-exported as premium Darjeeling tea.
Under the Revised Treaty of Trade between the Governments of India and Nepal in October 2009, both parties had agreed to exempt from basic customs duty, as well as from quantitative restrictions, the import of mutually agreed primary products.
Data from the Tea Association of India show that the total tea imported from Nepal in 2020-21 was 10.74 million kg; during the same period, the total tea import of India was pegged at 27.75 million kg.
This influx of cheap tea from Nepal is started from 2017.
In 2017, the production of Darjeeling Tea hit a low of 3.21 million kg.

Is climate change impacting production?

The reduction in production and rise of input costs is another worry.
Tea production in Darjeeling which used to be around 10-12 million kg a decade back now stands at 6.87 mkg (2021).
Decline in production is due to multiple factors-
- climate change,
- declining yields
- high absenteeism among workers.
- Because of the hilly terrain of Darjeeling there is no land left for expansion of tea gardens.
- The tea bushes are older than other parts of the country.
- Uprooting and planting them is both time and cost intensive.
- stagnant prices of auction of Darjeeling Tea
- CAGR (cumulative annual growth rate) fof the last six year is only 1.7% against an increasing cost of input between 10% and 12% CAGR
- The decline in demand from European markets
- The per capita tea consumption in the country remains at 850 grams and is less than neighbouring countries.